Cost Information

An estimated replacement cost reflects those costs that the contractor incurs during the period of construction of the residence. Land and the cost of development are not included in any residence cost. Subdivision and Yard Improvement costs can be obtained from Section C of the Residential Cost Handbook. The following is a more specific listing of what the residence costs do and do not include:

Included in the Costs:

  1. Plans, specifications, surveys and building permits.

  2. Normal interest on only the actual building funds during the period of construction, and processing fee or service charge. Typically, this will average half of the going rate over the time period plus the service fee. For average construction times, see Page D-11 of the Residential Cost Handbook.

  3. All material and labor costs include all appropriate local, state and federal sales taxes or GST, etc.

  4. Normal site preparation including finish, grading and excavation for foundation and backfill for the structures only.

  5. Utilities from structure to lot line figured for typical setback.

  6. Prorated amount of real estate commission in large tract development.

  7. Contractors’ overhead and profit, including job supervision, workmen’s compensation, fire and liability insurance, unemployment insurance, equipment, temporary facilities, security, etc., are included.

Not Included in the Costs:

  1. Costs of buying or assembling land, such as escrow fees, legal fees, property taxes, right of way, demolition, storm drains or rough grading, are considered costs of doing business or land improvement costs.

  2. Pilings or hillside foundations are priced separately see Section C of the Residential Cost handbook and are considered improvements to the land. This also refers to soil compaction and vibration, terracing, etc.

  3. Costs of land planning or preliminary concept and layout for large developments inclusive of entrepreneurial incentives or developers’ overhead and profit are not included, nor are interest or taxes on the land, feasibility studies, environmental impact reports, hazardous material testing, appraisal or consulting fees, etc.

  4. Discounts or bonuses paid for financing are considered a cost of doing business, as are funds for operating start up, project bond issues, permanent financing, developmental overhead or fixture and equipment purchases, etc.

  5. Yard improvements including septic systems, walls and fencing, landscaping and yard lighting, pools or other recreational facilities, etc., which can be priced separately from Section C of the Residential Cost Handbook.

  6. Off–site costs including sidewalks, curbs and gutters, utilities, park fees, jurisdictional hookup, tap–in, impact or entitlement fees or assessments, etc.

  7. Marketing costs to create the first occupancy including model or advertising expenses, leasing or brokers’ commissions, temporary operation of property owners’ associations, fill–up or membership sales costs and fees.

  8. General contingency reserve where a percentage of the total cost is set aside for some unknown future event, such as labor strikes, anticipated labor and material increases, etc.